12 tips for car and van rental start-ups trying to get their business in gear
If you’re starting a car and van rental business, read this first for tips to help you get off to a flying start
Are you one of those start-ups setting up business in the car rental industry but struggling to get it running smoothly? Well, you are not alone, because lots of new businesses managing a car fleet and contracting vans face the same problems.
From managing staff performance to overhauling your business model and refining your strategy, there’s an array of challenges a new business need to deal with. Which is why it’s generally best to learn from the experts and address the issues before they become stumbling blocks.
Here we provide 12 fleet management and van contracting tips for a vehicle rental business.
1. Revising your business model
It’s sensible to start with the foundation blocks. This is why it is important to allow some changes to your business model and address the pulling factors. Just give some time to evaluate factors such as the customers, vehicles, rates, competition, market, latest technology, manpower, and scope of growth.
Your business model must be equipped to deal with the changing marketplace. Ask yourself, does your business model still produce value? If not, it is time to give it an overhaul.
2. Track the numbers
Remember, an obsession with numbers is a quality in itself. There is no remedy that works better for performance management than tracking numbers repeatedly and often.
Moreover, numbers are not only top-line growth and competitive comparisons. There’s a multitude of numbers to consider in making your decision, including average length of rental, revenue per user, utilisation and many other metrics.
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3. Knowledge about your fleet of cars and customers
In the car rental business two things are extremely important: knowing your fleet of cars and your car rental customers.
If your customers perceive that a used car in good condition is fairly good, you can give it a try. Secondly, always keep the rate in check to position yourself as competitive and fair priced in the market.
4. Have a disposal plan in place
As a car rental service having a disposal plan is important. When the timing is perfect and the after-market is ready with a good rate, you should be prepared to dispose of the car that has arguably become over-used.
5. Mind the risks
For a business utilising a type of fast depreciating asset like cars, it is important to spend some valuable time on subrogation (the right for an insurance company to pursue a third party that caused an insurance loss to the insured).
Are you sure you are making the right claim to the insurance company at the right hour? It’s been a neglected area for many car rental companies and you should stay clear of falling foul too.
6. Give utmost focus to marketing
Can any business survive and maintain growth without sales and marketing? Just like any other business your car rental company should give utmost priority to marketing. Try to market the USP of your company to customers and in a competitive way.
7. Partner for marketing
These days marketing can go into overdrive when you can partner another company or service.
For a car hire company, partnering with hoteliers, travel companies, and even big transport facilities is a nice option. And you can always grope for partnering with event managers and business houses for contractual rental opportunities.
8. Enhancing profit
Did you ever figure out how much your brand should earn from the quality services you offer? Reality apart, this effort to determine the scope of enhancing your profitability is a crucial step.
Besides branding, you need to sensitize customers subtly about the distinction and why your cars deserve a better rate.
9. A strategy for fleet finance
What is most important in considering a fleet finance scheme? Well, for most it must be the lower interest rate and secondly, processing fee. Since these two things directly impact on your bottom line, you need to ensure the lowest for both.
10. Utilisation-based price management
This is an effective technique to ensure maximum revenue and squeeze the market potential for top-line growth. Based on the utilisation of the vehicles in real time you can make a variable price offering with a lower and upper limit. This helps to achieve higher cost to revenue ratio.
11. Let your employees be your strength
A pool of satisfied and brand-proud employees help an organisation ascend the ladder of growth. How can it be otherwise with car rental companies? Paying your employees the best remuneration will help to elevate your brand and ensure the quality of service for customers.
12. Do not hide anything from customers
A total disclosure of the rental agreement without anything hidden from them will ensure customers receive a service committed to customer satisfaction.
So, from the penalties to different exceptions everything possible should be made clear to them.